13th Nov 2023 13:25
(Alliance News) - British Land Co PLC's first-half results and outlook bump were well-received on Monday, and with interest rates at or near the peak, there could be more good times to come for the property investor.
The London-based commercial property developer and investor said in the six months to September 30, pretax loss widened to GBP49 million from a restated GBP20 million a year prior.
Revenue jumped 79% to GBP386 million from GBP216 million. This was thanks to capital and other revenue of GBP174 million, versus no such revenue a year before. On an underlying basis, revenue edged down to GBP212 million from GBP216 million.
The pretax loss resulted primarily from negative valuation movement of GBP201 million, compared to negative GBP189 million a year before. At the same time, financing income plummeted to GBP10 million from GBP151 million, and operating costs increased to GBP100 million from GBP51 million.
Valuations during the half-year were hurt by rising interest rates, though with Bank of England at or close to the end of its hiking cycle, pressure there may ease.
"With our expectation that the likely peak in the current interest rate cycle as now been achieved, we see sentiment improving across the sector and we are generally encouraged by British Land's commentary this morning although positives and negatives will broadly cancel out for the time being," analysts at Shore Capital Markets commented.
Shore rates British Land at 'hold'.
While rates my have peaked, it may be some time before major central banks begin cutting, Hargreaves Lansdown analyst Sophie Lund-Yates hinted.
"Interest rates have continued to dent the valuation of the portfolio, but the group remains positive that rates have peaked. Should that be true there will be space for a recovery, but the higher-for-longer narrative does clip potential in the medium term," the analyst added.
British Land declared an interim dividend of 12.16 pence per share, up 4.8% from 11.60p a year prior.
The company said it now expects estimates rental value growth at the top end of its previous guidance for financial year 2024 ending March 31. It added that it was comfortable with current market expectations for financial 2024 earnings.
In May, it guided for estimated rental value growth of 2% to 4% across campuses, the same growth in retail parks and 4-5% ERV growth in London urban logistics. On Monday it increased its guidance for retail parks to 3-5%.
British Land shares traded 3.4% higher at 324.40 pence each in London on Monday afternoon.
By Eric Cunha, Alliance News news editor
Comments and questions to [email protected]
Copyright 2023 Alliance News Ltd. All Rights Reserved.
Related Shares:
British Land